Gillian Duffy, the formidable Rochdale pensioner whose televised encounter with Gordon Brown provided the defining moment of Labour's general election campaign last year, has returned to public attention with a confrontation with Nick Clegg.

Duffy, a lifelong Labour supporter dubbed a "bigoted woman" by Brown, challenged Clegg in Rochdale to explain why the Liberal Democrats "went in" with the Tories.

The deputy prime minister replied: "Because you may remember, no one won the election at all. No one got a majority. I think it is important you have a government that can do things because we have to sort out a lot of mess we inherited from the previous lot."

Duffy asked Clegg to "look me in the eye and tell me" he was happy with the government's public spending cuts. "Whoever was in power now, any government would have to take difficult decisions," he told her.

Clegg explained Britain's record peacetime fiscal deficit was the equivalent of his family "maxing" out their credit cards. Duffy replied that his remarks were "just the same speech" she had heard him give an hour earlier on the radio. Clegg later conceded he had probably not won her vote.

Duffy said Clegg had failed to persuade her about the merits of the coalition. "It's gone wrong," she said. "Let's face it, it's all gone wrong."

It is almost a year since Duffy provided one of the most memorable moments of the general election when she confronted Brown on 28 April over the scale of immigration from eastern Europe. As he was driven away from the encounter Brown was caught on a television microphone describing her as a "bigoted woman".

A contrite Brown later met Duffy in private at her home. He emerged to describe himself as a "penitent sinner".

Rochdale is a significant town for the Lib Dems that was held by the legendary Cyril Smith between 1972 to 1992.

The Lib Dems lost the seat in 1997 and captured it again in 2005. They had high hopes of retaining the seat last year but lost it to Simon Danczuk, now the Labour MP for Rochdale.

Danczuk said the Lib Dems were divided in the town. "I'm amazed that Nick Clegg has the nerve to show his face in Rochdale after eight Lib Dem councillors recently resigned because of him," he said. "People won't forget how the Lib Dems ran away from their responsibilities and left our council in a mess. We know the regional growth fund has been cut by two-thirds and we desperately need more help from government to get our economy growing."

Warren Bradley, the leader of the Lib Dems on Liverpool city council, has warned the party will face extinction unless it abandons the coalition.

"We have to sever ties from the coalition; if we fail to do this, we have only our parliamentarians to blame," Bradley said in an email leaked to the BBC.

Clegg said: "I think Warren Bradley is one voice, but I think he is wrong. If anyone knows what it's like to clear up the mess after Labour, it is the people of Liverpool. We can't do it overnight.

"We are doing something really difficult, we are clearing up this terrible mess we inherited from Labour. I think we have got to stick to the plan because that will lead us to hand on a better economy for future generations. If we get it right, there is a better, brighter future."